Women have often lagged behind men when it comes to savings and involvement with investment decisions. But why do they save less and reach retirement so far behind male counterparts?
Many reasons have been given for the disparities between men and women – especially when it comes to finances.
Taking time out to raise families has always been high on the list of reasons. Less representation in the workplace is another. Also, the division of traditional male-female roles has seen men making more decisions about money than women.
Pressure groups, media campaigns and more ladies securing senior positions in both the corporate world and government has started to change that.
However, when it comes to savings – and especially saving towards retirement – there is much work to be done.
The pensions gap
Worrying research published by the Pensions Policy Unit (PPI) shows that, on average, women over fifty in the UK have around half the private pension wealth of men of a similar age.
At retirement age (65), the gap between men and women can reach more than £100,000 (from ONS data, 2014-16).
The gender pension gap is particularly significant as it affects women at a time when there is little they can do to correct the imbalance.
Moreover, the pensions gap places women at serious risk of poverty in later life.
Does Brexit change savings habits?
As part of their Brexit analysis, research from KPMG shows that men are more cautious about money as concerns about trade and the economy rise.
In fact, over one third of men are changing how they manage money because of Brexit concerns. Only one in four women are doing similar.
Put simply, this means that in recent years some men have been saving more. Ladies, on the other hand, have not changed their habits quite the same because of Brexit.
This is contributing to an even greater gap in savings between men and women.
How to address the gender pension gap
Women typically earn less and save less than men. To change this women need to take control of their finances as soon as possible, at a younger age.
That means starting small, making regular savings early which will grow over time.
Because there are likely to be breaks in earning, they need to ensure that savings continue. That could mean trimming family budgets, reducing spending or finding innovative ways to earn additional income.
Crucially, unless the UK government makes further changes to pay, benefits and pension provision, they must seize the initiative themselves.
In fact, according to PPI, because women tend to live longer, they need to save around five to seven per cent more than men so they can enjoy the same level of income during retirement.
We’re here to help
Logic Wealth Planning has a balanced team of advisers who can handle queries about savings and investments.
We have dealt with women at all stages of the financial journey and can offer rounded independent advice.
If you would like an informal chat, in private, with no obligations, please contact our team.
Call 0808 1234 321 or email firstname.lastname@example.org now.